Was it worth it? Do low-income New Zealand student loan borrowers increase their income after studying for a tertiary qualification?

This report looks at student loan borrowers living in New Zealand 20 to 50 years of age with pre-study incomes below the student loan repayment threshold.

Summary: The average incomes of these New Zealand student loan borrowers, and their rate of increase in income, are higher if they complete a higher-level qualification like a diploma or bachelors degree, compared to those who complete a certificate-level qualification.

Women generally have lower average graduate incomes, and lower rates of increase in their income compared to men, although older women completing bachelors degrees have higher income trajectories than their male counterparts.

Those on a benefit, indicating some difficulty in accessing the labour market, generally have smaller increases in income on completing the same level of qualification, and relatively flat rates of increase in income after graduating, compared to those not on a benefit, on average.

Younger graduates generally have higher rates of increase in their incomes than older graduates, on average.

Average incomes increase with time, generally.

These factors and their interactions are associated with both whether a low-income student loan borrower living in New Zealand crosses the loan repayment threshold—that is, has an income after study that obliges them to start repaying their student loan—and the timing of when this occurs.

Younger men generally have average incomes which are above the loan repayment threshold one year after completing a qualification at any level, and under most circumstances, men have average incomes above the threshold after some years even if they don’t complete their qualification.

Only women who complete diploma or bachelors degrees have average incomes above the repayment threshold soon after graduating, though in the longer term, most women’s average graduate incomes cross the repayment threshold, although it is only just above the threshold for those who complete lower-level qualifications.

If any individual student loan borrower finds ongoing paid employment after completing their study, they are likely to have an income above the student loan repayment threshold. It is therefore the interplay between their access to the labour market, and how that is facilitated by their qualification, and their personal characteristics and circumstances, which will determine whether they will have sufficient income to be obliged to repay their student loan.